The marriage-planning enterprise his spouse owned went bust in 2018. However that didn’t cease Fahad H. Shah from utilizing the corporate to use for a $1.6 million federal Paycheck Safety Program loan, prosecutors say.
Shah, 44, of Murphy was charged final Thursday with fraud, accused of utilizing the PPP loan proceeds to repay the couple’s mortgage, purchase a Tesla automobile and enhance his E-Commerce funding account by $550,000, courtroom data present.
Shah falsely claimed on the appliance that WBF Weddings by Farah Inc. had as many as 123 workers and a mean month-to-month payroll of $701,550, based on the indictment.
The enterprise was fashioned in 2011. His spouse was listed in company paperwork because the director. However the indictment stated Shah “purported to be the 100% owner.”
The indictment, unsealed Tuesday, fees Shah with wire fraud, making a false assertion to a bank, and interesting in a financial transaction with criminally derived property. 4 of the eight counts carry a most sentence of 30 years in jail.
The federal government, in a separate civil case, is attempting to have the couple’s Murphy home forfeited.
The indictment is the third such fraud prosecution within the Japanese District of Texas in reference to the emergency enterprise rescue loans, officers stated.
An engineer was charged final month in Beaumont with fraud for allegedly making use of for $10 million in PPP loans and falsely claiming to have 250 workers. Shashank Shekhar Rai, 30, is charged with wire fraud, bank fraud, making a false assertion to a monetary establishment and making a false assertion to the Small Enterprise Administration about his “purported business.”
And final month, Samuel Yates, 32, of Maud, in northeast Texas, was charged with looking for greater than $5 million in PPP loans after claiming to have greater than 400 workers when the truth is he had none, prosecutors stated.
“The Paycheck Protection Program is a vital tool for American small businesses and their employees who are struggling with the economic fallout from this pandemic,” U.S. Legal professional Stephen J. Cox stated in a press release. “The Eastern District of Texas is committed to pursuing fraudsters who exploit this program to the detriment of others.”
Authorities say Shah utilized for about $three million in emergency loans starting in April and acquired about half of that in early May. His different software was rejected.
He was arrested Tuesday morning and appeared earlier than a U.S. Justice of the Peace decide in Sherman, the place he entered a not responsible plea. His lawyer couldn’t instantly be reached for remark.
The PPP loans are assured by the Small Enterprise Administration and supplied underneath the Coronavirus Assist, Aid, and Financial Safety Act.
Congress handed the CARES Act in March to, amongst different issues, present forgivable loans to companies struggling hardships brought on by the COVID-19 pandemic.
Shah claimed that between 2019 and 2020, the wedding-planning enterprise paid as a lot as $2.5 million in wages, ideas and different compensation, the indictment says.
However WBF Weddings by Farah forfeited its company standing in 2018 after “failing to file a state franchise tax return and/or to pay state franchise taxes,” based on the indictment.
Fahad Shah and his spouse, Farah Modi-Shah, bought a house at 308 Publish Oak Path in Murphy in March 2018, acquiring a mortgage within the quantity of $335,266, based on the civil forfeiture lawsuit.
Simply days after the PPP loan was wired into Shah’s enterprise account, the mortgage was paid off, the lawsuit says.
Modi-Shah is listed in property data because the proprietor of the three,873-square-foot home, which is assessed at greater than $400,000 for tax functions.
A prime Justice Division official stated earlier this 12 months that the company was embarking on a major effort to crackdown on fraud associated to the coronavirus pandemic. The official stated “multiple ongoing investigations” of people and small companies had been underway.